How Video Games Are Getting Inside Your Head And Wallet

Max Kelmon, 13, has his own little version of a man cave in Palo Alto, Calif. Behind the family kitchen in a converted garage, he has an Xbox, a big-screen TV, headphones and a microphone. There's an old couch covered in a sheet. And that couch where he parks himself, surrounded by boxes and Christmas lights, is one of Max's favorite places on the planet.

From that couch, he connects to friends all over the globe and he spends hours, pretty much every day, honing his skills in Call of Duty.

The first commercially successfully video game, Pong, invaded Americans' living rooms 38 years ago. Since then, the industry has evolved from a simple bouncing ball in the Atari original to games with astounding graphics and sound, most of them connected to the Internet.

That means that kids like Max can play with people spread across the globe. It also means that gaming companies can analyze how gamers play each and every decision they make.

So when kids sit down with a game, they are actually sitting across a screen from adults who are studying them and, in some cases, trying to influence their behavior in powerful ways.

Researchers in game companies tweak games to get players to stay on longer, or to encourage them to spend money on digital goods. They study gamers' reactions. It's become a science.

And parents like Max's mom, Vanessa Kelmon, often feel outgunned.

"I hate it. I really do," she says. "He could play Xbox for 12 straight hours. [He has] friends in Mexico City and friends in England."

Vanessa says Max is addicted to video games. "When I took it away, he started to cry," she says. "My God, I am offering you to go play tennis or go play golf ... and I am making you shut this down, and you're crying about it."

Tracking Clicks And Purchases

In millions of families, video games are a source of intense love and intense hate because they can be so incredibly compelling. You might not believe that if you don't play them, but you can get lost in a great game. They make you feel good.

And it's no accident, says Ramin Shokrizade, the game economist for Wargaming America.

"The technology for this has gotten quite sophisticated," says Shokrizade, who began his career in neuroscience and behavioral economics. "At this point, every major gaming company worldwide either has in place a fully developed business intelligence unit, or they're in the process of building one."

Today's game design is dominated by research, he says. As we play games, game developers are tracking every click, running tests and analyzing data.

They are trying to find out: What can they tweak to make us play just a bit longer? What would make the game more fun? What can get us to spend some money inside a game and buy something?

So as millions of people play, designers introduce little changes and get answers to all of these questions in real time. And games evolve.

For example, most games today sell virtual goods right inside the game like a new gun in Call of Duty or a cow in FarmVille. Shokrizade's job is to get people to buy them.

One of the tricks of the trade is something developers at Zynga which created FarmVille used to call "fun pain" or "the pinch." The idea is to make gamers uncomfortable, frustrate them, take away their powers, crush their forts and then, at the last second, offer them a way out for a price.

John Davison, who works at video game company Red Robot Labs, says free-to-play smartphone games like Candy Crush Saga and Puzzle & Dragons have become brilliant at using these tests to figure out how to get people to spend money.

And the research is working. Davison says those games are making millions of dollars every day.

Kids Who Cash In

When adults play games, they consent to share that personal information about how they play. But Shokrizade worries about the millions of kids who play. "If it's a child, how do you even get consent for something like that?" he says.

Many of the people spending cash are kids, including Davison's children. Game consoles sell gift cards at convenience stores that allow kids to make purchases on video games, even if they don't have a credit card.

Davison's kids started playing Clash of Clans this year. In the game, developed by Supercell, you get to run your own little Viking village and team up with friends. To protect your clan, you can spend money on forts and weapons.

It's free to download but because of these virtual goods, it's one of the highest-grossing apps in Apple's store.

Davison's two boys loved it. "They were clearly getting a lot of enjoyment out of it," he says. "But it did get to the point where my wife and I were like, 'Do you really want to be spending everything on this?' "

And this is coming from a man who has devoted his life to video games.

"I was trying to sort of total up in my head how much the kids had spent on this game," he says. "But there was also a degree of admiration for the team at Supercell, that they had managed to get under my 10-year-old's skin to this degree."

Apple recently settled a class-action lawsuit about kids making in-app purchases like this without their parents' permission, and the European Union is considering new regulations on games.

Some regulations are taking place on a smaller scale. In Menlo Park, Calif., Michelle DeWolf banned her 10-year-old son, Austin Newman, from playing games during the school week.

Originally, she gave him 30 minutes a day, but that didn't work.

"He couldn't think about doing his homework. He couldn't think about walking the dog or helping in any other way, because he couldn't get his mind off the idea that he had 30 minutes coming," she says.

"Once he knew there was nothing, he didn't think about it during the week, and he almost maybe I'm not objective but he almost seemed relieved."